As family lawyers, we often see clients who are understandably focused on immediate concerns—housing, income, and childcare. But one area that’s frequently overlooked, and can have serious long-term consequences, is pensions. Whether it’s skipping a Pension on Divorce Expert (PODE) report, opting for spousal maintenance instead of pension sharing, or simply ignoring pensions altogether, these shortcuts can leave clients financially exposed in later life.
Why Pensions Matter More Than You Think
Pensions are often the second most valuable asset in a marriage after the family home. Yet many clients—especially those without legal representation—don’t realise that pensions should be part of the financial settlement. Ignoring them can mean missing out on future income and long-term financial security.
A Pension Sharing Order allows one spouse to receive a percentage of the other’s pension, transferred into a pension in their own name. This can be a vital tool for achieving a clean break and ensuring both parties to meet their income needs in retirement.
Spousal Maintenance vs Pension Sharing
Occasionally, client’s come to me suggesting that they would prefer to have a spousal maintenance order rather than tackle the complexity of pensions. While maintenance can provide short-term support, it’s not reliable or sustainable:
- It can be varied or terminated if circumstances change (e.g. the payer loses their job or retires).
- It is based on need rather than sharing where as, in longer marriages, the court is likely to order that there should be equalisation of pension income by way of pension sharing order.
- It ends on the death of the paying spouse leaving the recipient without income.
- It ends automatically on remarriage, and may be reduced if the recipient cohabits given that the amount of spousal maintenance awarded is based on need.
- It rarely lasts for life—courts increasingly favour clean breaks where possible.
In contrast, a pension share is secure, independent, and unaffected by future relationship changes. It provides a long-term income stream that doesn’t rely on the goodwill or financial stability of an ex-spouse.
Why a Pension On Divorce Expert Report Is Often Essential
Not all pensions are created equal. A defined benefit pension (like those in the NHS or civil service) may offer far greater retirement income than a defined contribution scheme, even if their cash equivalent values (CEVs) look similar on paper.
This is where a Pension on Divorce Expert (PODE) comes in. A PODE can:
- Analyse different pension types and calculate fair division.
- Help equalise retirement income, not just capital.
- Avoid misleading comparisons based on CEVs alone.
- Advise on appropriate offsetting amounts should clients prefer to receive capital in lieu of pension.
Skipping a PODE report might save money upfront, but it risks unfair outcomes—especially in needs-based cases or where pensions are complex or high-value.
Offsetting Isn’t Always the Answer
Another common shortcut is pension offsetting—where one party keeps more of another asset (like the family home) instead of receiving a pension share. But this can be risky:
- Property and pensions aren’t directly comparable.
- Pensions offer income and benefits that property doesn’t.
- Without expert valuation, offsetting can lead to serious imbalance.
Final Thoughts: Don’t Let Pensions Be an Afterthought
Divorce is a time of emotional and financial upheaval, and it’s tempting to simplify wherever possible. But pensions are too important to ignore or shortcut. They’re not just numbers on a page—they’re your future income, your retirement security, and your independence.
As family lawyers, we have a duty to ensure our clients understand the value of pensions, the risks of relying on maintenance, and the importance of proper expert advice. Because the decisions made during divorce don’t just affect today—they shape the rest of your life.
How can we help?
Emma Davies is a Partner in our Family Law team, which is ranked in Tier One in the independently researched publication, The Legal 500.
Emma specialises in divorce and financial settlements, which involve complex issues and substantial assets. She also advises on pre- and post-nuptial agreements, cohabitation agreements and separation agreements, along with private law Children Act disputes. Emma is a qualified collaborative law and Resolution Together practitioner.
If you need further advice on the subjects discussed above, please contact us and we will be happy to discuss your circumstances in more detail and give you more information about the services that our family law solicitors can provide, along with details of our hourly rates and fixed fee services.
For more information or advice, please call Emma or another member of our team in Derby, Leicester or Nottingham on 0800 024 1976 or contact us via our online form.
Contact us